Apple misses mark as customers await iPhone 4S
Source: Agencies |
October 20, 2011, Thursday
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Print Edition
Print Edition
APPLE has stunned New York's Wall Street with quarterly results that missed expectations for the first time in years as customers held off buying iPhones until the October launch of the latest model.
Shares fell 7 percent in extended trading on Tuesday, wiping some US$27 billion off the value of the world's largest technology company.
It was Apple's first quarterly earnings report under Chief Executive Tim Cook, who took over from Steve Jobs in August at a critical juncture for the company. Apple is battling Google in the mobile arena, as well as other challengers such as Samsung and Amazon.
Channing Smith, co-manager at Capital Advisors Growth Fund, said: "Investors are going to speculate that there is change under way now that Jobs is gone, and that there is trouble ahead."
Apple said it sold 17.07 million iPhones in its fiscal fourth quarter - ending September 24 - well short of the 20 million forecast by analysts. The iPhone is Apple's flagship product, yielding some 40 percent of annual sales.
Revenue rose 39 percent to US$28.27 billion, lower than the average analyst estimate of US$29.69 billion, according to Thomson Reuters. It was the first time Apple missed revenue expectations since the fiscal fourth quarter of 2008.
Net profit was US$6.62 billion, or US$7.05 a share, shy of expectations.
BGC Partners analyst Colin Gillis saide: "Their business is not an annuity. They have to sell their quarter's worth of revenue every 90 days. They need to set records every time they report to keep up the momentum."
Apple executives said consumers postponed purchase decisions because of speculation a new phone was on the way. Apple unveiled the iPhone 4S in early October.
Apple, which typically offers projections so conservative they are disregarded, this week forecast December quarter revenue and earnings above Wall Street's estimates.
WP Stewart portfolio manager Michael Walker said: "There is no question this was a transition quarter ahead of the 4S. With the early pace of iPhone 4S sales, my guess is that disappointment is relatively short-lived."
At his first earnings conference, Cook honored predecessor Jobs, who died on October 5 from cancer, saying he was "very confident" of posting record iPhone sales.
The company moved 4 million -iPhone 4S units - more than double its predecessor - in its first three days.
Another area for optimism involves iPads. The company moved 11.12 million units during the quarter despite attempts by various manufacturers, including Samsung, to capture a slice of the tablet market. Amazon has now also entered the fray with its Kindle Fire tablet.
Shares fell 7 percent in extended trading on Tuesday, wiping some US$27 billion off the value of the world's largest technology company.
It was Apple's first quarterly earnings report under Chief Executive Tim Cook, who took over from Steve Jobs in August at a critical juncture for the company. Apple is battling Google in the mobile arena, as well as other challengers such as Samsung and Amazon.
Channing Smith, co-manager at Capital Advisors Growth Fund, said: "Investors are going to speculate that there is change under way now that Jobs is gone, and that there is trouble ahead."
Apple said it sold 17.07 million iPhones in its fiscal fourth quarter - ending September 24 - well short of the 20 million forecast by analysts. The iPhone is Apple's flagship product, yielding some 40 percent of annual sales.
Revenue rose 39 percent to US$28.27 billion, lower than the average analyst estimate of US$29.69 billion, according to Thomson Reuters. It was the first time Apple missed revenue expectations since the fiscal fourth quarter of 2008.
Net profit was US$6.62 billion, or US$7.05 a share, shy of expectations.
BGC Partners analyst Colin Gillis saide: "Their business is not an annuity. They have to sell their quarter's worth of revenue every 90 days. They need to set records every time they report to keep up the momentum."
Apple executives said consumers postponed purchase decisions because of speculation a new phone was on the way. Apple unveiled the iPhone 4S in early October.
Apple, which typically offers projections so conservative they are disregarded, this week forecast December quarter revenue and earnings above Wall Street's estimates.
WP Stewart portfolio manager Michael Walker said: "There is no question this was a transition quarter ahead of the 4S. With the early pace of iPhone 4S sales, my guess is that disappointment is relatively short-lived."
At his first earnings conference, Cook honored predecessor Jobs, who died on October 5 from cancer, saying he was "very confident" of posting record iPhone sales.
The company moved 4 million -iPhone 4S units - more than double its predecessor - in its first three days.
Another area for optimism involves iPads. The company moved 11.12 million units during the quarter despite attempts by various manufacturers, including Samsung, to capture a slice of the tablet market. Amazon has now also entered the fray with its Kindle Fire tablet.
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